Monday, January 28, 2019

Domestic crude output down 4.3% in December


Direct bene t transfer, interest waiver on crop loans within a certain limit are likely measures
India’s domestic crude oil production dipped 4.3 per cent while gas production was 4.19 per cent higher in December 2018, compared with December 2017.
The overall output of nished products from oil re neries was 4.96 percent lower during the month under review.An of cial statement said India’s crude oil production during December 2018 stood at 2.86 million tonnes. Of this, production by ONGC was 1.76 million tonnes which is 5.42-per cent lower, compared with production during December 2017.
ONGC’s Output
ONGC’s lower output is attributed to loss of production from western offshore areas in the absence of mobile offshore production units Sagar Samrat and Sagar Laxmi. Sub-sea leakage in some well uid lines of Mumbai High & Neelam Heera Asset, led to ow restriction.
A decline in liquid production and increase in water cut in various fields of Mehsana, Rajahmundry and Assam assets also dragged down oil production. Crude oil production by Oil India during December 2018 was 0.27 million tonnes, which is 4.66-per cent lower compared with December 2017.
A major reason for lower production is less-than-planned contribution from work over wells and drilling wells, an of cial statement said. Crude oil production by private and joint venture projects under the Production Sharing Contract regime was 0.83 million tonnes, which is 1.72 per cent lower than production in December 2017.
Natural gas output
The country’s natural gas production during December 2018 was 2866.51 million standard cubic meters (mscm) in December 2018. Natural gas production by ONGC alone during the month stood at 2197.0 mscm, which is 9.81 per cent higher when compared with December 2017.
But natural gas production by OIL during the month was 232.65 mscm which is 1.82 per cent lower than December 2017. Natural gas production by private and joint venture projects was 436.86 mscm, which is 14.94 per cent lower when compared with December 2017.
Oil India said the major reason for lower production is loss of potential in Deohal area due to presence of CO2 in production stream and due to bandh and miscreant activities. An of cial statement said in RIL’s Sohagpur West CBM Block, there has been reported under performance of Coal Bed Methane (CBM) wells and production was impacted due to the constraint imposed by IFFCO on CBM offtake.
Refinery Output
Re nery production during the month was 21.03 million tonnes, which is 4.96 per cent lower that output during December 2017. The shortfall in re nery production in some Central Public Sector Enterprise re neries was attributed to lower crude receipt and restricted Delayed Coker unit throughput in IOCL’s Gujarat re nery. A delay in arrival of crude vessels at MRPL-Mangalore re nery, among other reasons, was attributed to the lower output.

Sops for agriculture to top Govt’s priority list


Direct bene t transfer, interest waiver on crop loans within a certain limit are likely measures
With farm distress leading to the ruling BJP’s drubbing in three key States last month, expectations are high that sops for agriculture will top the list of priorities when the stand-in Finance Minister Piyush Goyal presents the Interim Budget on February 1.
With rural economy still in doldrums, the Narendra Modi government cannot afford to be seen as a regime that ignores the interests of farmers, who constitute a sizeable chunk of the electorate. “It is not that this government hasn’t done anything for farmers in the last four-and-half years. But the perception of not delivering on the farm front is still sticking out like a sore thumb,” said a source in the Agriculture Ministry, who did not want to be named.
With general elections less than 100 days away, the Budget may be the government’s last chance to salvage the situation. “More than doing, it should be ‘seen’ as doing something,” the source said adding that the Government is working on “something big” for the sector. “They seem to have a political need to announce big-ticket schemes for farmers (like the direct income support scheme adopted in Telangana and other States) but as there is little preparedness, there is a chance of boomerang,” said Avik Saha, national coordinator for Jai Kisan Andolan. “So we expect them to announce something for farmers in the Budget which would subsequently be ampli ed through giant megaphones,” he said.
Direct benefit transfer
Among those schemes that are said to be considered by the Finance Ministry is a direct bene t transfer scheme which promises to give a per acre subsidy directly into the farmers’ accounts. Though its implementation all over the country may cost over ₹1 lakh crore, it may give an impression that the government is doing something for the farmers. It is said that the government will try to curtail its impact on the scal health of the economy by subsuming or reducing subsidy on fertilisers and minimum support prices for grains. Also under consideration is a scheme to waive interest on crop loans within a certain limit to those farmers who are prompt with repayments.
On Wednesday, addressing a meeting in Mumbai, Union Agriculture Minister Radha Mohan Singh made it amply clear that the focus would be on farmers. The Interim Budget will be dedicated to the farmers and it will be yet another step to ful lling the goal of doubling farmers’ income by 2022, he said. Singh has already hinted that there will be double-digit growth in agricultural credit in the Budget, which was around ₹11 lakh crore in the previous Budget.

Pulse prices are rising, but only a little - AGRI-BIZ & COMMODITY


Buffer stocks resulting from Centre’s incentives have kept prices in check
The prices of pulses may have improved slightly since government agencies began procurement, but normalisation of market prices may have to wait till the end of the year, experts have said. "The government’s efforts of encouraging farmers through higher minimum support prices (MSPs), which were much higher than the prices that the market can sustain, and creating buffer stocks of pulses much beyond the 1 million mt requirement, resulted in a sharp rise in pulses production during the 2016-17 season (23.13 mt ), but pulse prices suffered a huge setback on account of this," said Sanjay Kaul, MD & CEO of National Collateral Management Services Limited (NCML). Prices have still not fully recovered from that setback but government efforts like announcing schemes such as the Merchandise Exports from India Scheme (MEIS) and curbing imports has to some extent absorbed the production surplus, Kaul said.
According to him, the excessive production has resulted in filling up of pipelines and hence lowered prices since then. “But since last year the situation is normalising and as the acreage and production is reducing owing to the lower prices the supply-demand situation is expected to take a normal course by the end of this year,” Kaul told BusinessLine.
The annual commodity year book brought out by NCML, India’s largest private-sector agriculture post-harvest management company, has dealt extensively with the pulses scenario in the country. Per the first advanced estimates brought out by the government last August, production of most pulses (tur, chana, urad and moong) is estimated to be on the lower side as compared to the previous year. The production is estimated to be lower due to adverse weather conditions in States such as Maharashtra, Madhya Pradesh, Karnataka and Andhra Pradesh. But the prices may remain subdued because of the ample stocks maintained by government agency NAFED and also with the recent rains improving the chances of a better crop than anticipated, according to Kaul.
Market rates rising: NAFED
However, NAFED officials maintained that the prices of pulses are rising in the market. "In the last four months, there has been an increase in the market prices of major pulses across most markets in the country. Even though NAFED made a similar intervention in last year too, we didn’t see a similar uptick in mandi prices in the previous year,” said Sanjeev Kumar K Chadha, NAFED MD (see chart). India’s chana (gram) production in 2018-19, for instance, is estimated to be 10.5 mt, nearly 6.5 per cent lower than the 2017-18 production. Similarly, at 4.08 mt, tur production this year too is expected to be 9.33 per cent lower than that in the previous year. According to NCML, Indian traders had consumed the full tur import quota of 2 lakh tonnes in 2017-18 as in Myanmar tur was cheaper and parity was in favour of importers despite the 10 per cent import duty. Moreover, corporate buyers who are hoping that the government will open up imports in the lean season, have already booked 3-4 lakh tonnes of tur in Myanmar. “The buyers are planning to store their inventory in Myanmar till the Indian government lifts restrictions on imports,” it said. Urad production in 2018-19 is projected to be lower than the previous year’s 3.56 mt. According to the firm, despite the government increasing the MSP of urad to Rs. 5,600 from Rs. 5,400 a quintal, farmers shifted away from urad due to lower domestic prices throughout the year, it said.
Time for more schemes
According to Kaul, it’s time that the government announced additional schemes with export incentives not only on chana but on the exports of processed products made of chana, such as dal and besan. Besides, the government should leverage its bilateral and free trade agreements with South Asian and South-East Asian countries. For instance, Bangladesh imports about 12-15 lakh tonnes of pulses, while Sri Lanka imports roughly 3 lakh tonnes.